Question

Using 2017 tax law,indicate;The taxpayers correct and most favourable filling status.Their greatest number of personal and dependent exemptions allowed for 2017.Whether the taxpayer is eligible to claim and receive the earned income tax credit.

Remember each dependent must be qualifying child or qualifying relative,Numbers in parentheses indicate age.Unless otherwise stated,each prospective dependent is an unmarried US citizen who does not provide more than half their own support.In no case will more than one taxpayer attempt to claim the same qualifying child as a dependent.No one other than the persons listed lived in the home.Each taxpayer has only the income stated.The taxpayer is the first person named unless you determine that married filing joint is the correct filling status.

Ben(46) is umarried.His mother,susan(81)lives in a nursing home.Ben pays the entire cost of the nursing home and more than 50% of susan"s total support.Ben wages were $75000.Susan's income consisted of $1600 taxable interest and $9,600 social security benefits.

1.What is the taxpayers correct and most favourable 2017 filing status?

2.What is his greatest number of personal and dependent exemptions allowed for 2017?

3.Is the taxpayer eligible to claim and receive the earned income tax credit?

Answer 1

The head of household status can lead to a lower taxable income and greater potential refund than the single filing status, but to qualify, you must meet certain criteria. To file as head of household, you must:

• Pay for more than half of the household expenses
• Be considered unmarried for the tax year, and
• You must have a qualifying child or dependent.

Some of these terms, such as "considered unmarried" and "qualifying child or dependent" may seem a bit confusing, but the IRS has provided a series of guidelines to help taxpayers understand whether or not they qualify to file as head of household.

1. the taxpayers correct and most favourable 2017 filing status is Head of House hold

2. His greatest number of personal and dependent exemptions allowed for 2017

For tax year 2017, the personal exemption amount is $4,050 (the same as 2016).

3. the taxpayer is NOT eligible to claim and receive the earned income tax credit

The maximum tax credits for the return you'll file in 2018 for the 2017 tax year are:

• $6,318 if you have three or more qualifying children
• $5,616 if you have two qualifying children
• $3,400 if you have one qualifying child
• $510 if you have no qualifying children